After years of sitting on the fence, HSBC is now reportedly interested in expanding its Wealth and Asset management operations in Asia. As the Asian middle class continues to grow, HSBC is now hoping to get in on the action, with three to four deals reportedly on the table, according to a report in Bloomberg. Analysts fear HSBC might be a little too late to the party, as local banks have been given more favourable terms, allowing them to grow rapidly over the past few years. The Development Bank of Singapore Limited (DBS) and Bank of Singapore have made successful mergers recently. European banks on the other hand have been scaling down their Asian operations recently, as the economic and political climate has been harsher of recent. This hasn’t stopped Union Bancaire Privee and LGT from increasing their operations however, even as Barclays, SocGen, ABN Amro and other European private banks are departing.
The Asianexit of some of the world’s largest private banks hasn’t deterred HSBC, as the company has strong ties to Hong Kong, the place it was founded. The British bank has been distracted of late regarding its position in the financial centre of Europe, and the possibility of relocating out of London in light of the Brexit. Despite the bleak outlook of the United Kingdom maintaining passporting rights, the British institution is insisting that it will remain in London. Analysts expect HSBC’s journey back into Asian asset management will be a tough one, considering a large number of companies have already been sold off. Whatever offer comes next might be priced at a premium. With plenty of competition and limited options, the few institutions looking to expand by acquiring others may not want to take such risks, especially as the tide is turning to favour local banks.